SECOND AMENDMENT TO LEASE
AGREEMENT made as of the 20 th day of January, 2009
by and between RECHLER EQUITY B-1 LLC, a Delaware limited liability
company having its principal office at c/o Rechler Equity Partners,
225 Broadhollow Road, Melville, New York 11747 (hereinafter called
"Landlord"), and CHYRON CORPORATION, a New York corporation having
its principal office at 5 Hub Drive, Melville, New York 11747
(hereinafter called "Tenant").
RECITALS
WHEREAS, Reckson Associates, a predecessor-in-interest to
Landlord, and Tenant entered into an Agreement of Lease dated as of
May 9, 1994 (the "Original Lease") for the lease of 46,665 square
feet of space (the "Demised Premises" or "Premises") in the
building located at 5 Hub Drive, Melville, New York (the
"Building");
WHEREAS, REP B LLC, a predecessor-in-interest to Landlord, and
Tenant entered into an First Amendment to Lease dated as of
November 20, 2003 (the "First Amendment"); whereby, among other
things, the term of the Lease was extended to and including June
30, 2009; and
WHEREAS, Landlord and Tenant desire to amend the Lease to, among
other things, extend the term of the Lease to and including July
31, 2019 (the "Extended Expiration Date").
NOW, THEREFORE, in consideration of the mutual promises
contained herein and for other good and valuable consideration, the
receipt and sufficiency of which being hereby acknowledged, the
parties agree as follows:
ARTICLE I
Definitions
1.1 The recitals are specifically incorporated into the body of
this Agreement and shall be binding upon the parties hereto.
1.2 Unless expressly set forth to the contrary and except as
modified by this Agreement, all capitalized or defined terms shall
have the meanings ascribed to them in the Lease.
1.3 The term "Lease", as used herein, shall mean and refer to
the Original Lease, as modified and amended by the First
Amendment.
ARTICLE II
Lease Modifications
The Lease is and shall be modified and amended as follows:
2.1 Term . (a) Effective as of the date hereof, Article 1
of the Lease, as modified and amended pursuant to the provisions of
Section 2.1.1 of the First Amendment, is hereby further modified
and amended to provide that the term of the Lease is extended to
and including the Extended Expiration Date, unless sooner
terminated pursuant to any of the provisions of the Lease.
Effective as of the date hereof, all references made to the
"Expiration Date" in the Lease shall mean and refer to the Extended
Expiration Date.
2. 2 Rent . Effective as of the date hereof, Article 3(a)
of the Lease, as modified and amended pursuant to the provisions of
Section 2.1.2 of the First Amendment, is hereby further modified
and amended to reflect that Tenant shall pay Rent for the Demised
Premises as follows:
(a) from the date hereof to and including June 30, 2009, Rent
shall be payable in accordance with the Rent schedule set forth in
Section 2.1.2(b) of the First Amendment;
(b) from July 1, 2009 to and including the Extended Expiration
Date, Rent shall be payable as follows:
From July 1, 2009 to and including
June 30, 2010, Rent shall be $536,647.56, payable in equal monthly
installments of $44,720.63.
From July 1, 2010 to and including
June 30, 2011, Rent shall be $555,430.20, payable in equal monthly
installments of $46,285.85.
From July 1, 2011 to and including
June 30, 2012, Rent shall be $574,870.20, payable in equal monthly
installments of $47,905.85.
From July 1, 2012 to and including
June 30, 2013, Rent shall be $594,990.72, payable in equal monthly
installments of $49,582.56.
From July 1, 2013 to and including
June 30, 2014, Rent shall be $615,815.40, payable in equal monthly
installments of $51,317.95.
From July 1, 2014 to and including
June 30, 2015, Rent shall be $637,368.84, payable in equal monthly
installments of $53,114.07.
From July 1, 2015 to and including
June 30, 2016, Rent shall be $659,676.84, payable in equal monthly
installments of $54,973.07.
From July 1, 2016 to and including
June 30, 2017, Rent shall be $682,765.44, payable in equal monthly
installments of $56,897.12.
From July 1, 2017 to and including
June 30, 2018, Rent shall be $706,662.24, payable in equal monthly
installments of $58,888.52.
From July 1, 2018 to and including
June 30, 2019, Rent shall be $731,395.44, payable in equal monthly
installments of $60,949.62.
From July 1, 2019 to and including the
Extended Expiration Date, the Rent shall be payable in one (1)
monthly installment of $60,949.62.
(c) Provided Tenant is not in default beyond the applicable
notice and cure period, Tenant shall be relieved of its obligation
to pay the installment of Rent due with respect to the month of
August, 2009.
2.3 Landlord Alterations . Tenant hereby acknowledges
that all work which was required to be performed by Landlord under
the Lease has been performed. Tenant accepts the Demised Premises
in its current "as is" condition and acknowledges that Landlord
shall not be obligated to perform any work or make any
installations in order to prepare the Demised Premises for Tenant's
continued occupancy, except that Landlord shall, at Landlord's cost
and expense, perform the following work: (a) replace the heating
ventilating and air conditioning units servicing the Demised
Premises, (b) repair, seal and re-stripe the parking area, (c)
repair all roof leaks, (d) repair the loading docks, (e) landscape
the front entrance to the Demised Premises, (f) power wash the
façade of the Building, (g) replace the rear deck door and
outside meter room door, and (h) perform the work and make the
installations set forth on Exhibit 1 annexed hereto (collectively,
"Landlord's Work"). Tenant shall be responsible for moving the
furniture in the Demised Premises (at Tenant's sole cost and
expense) in order to permit Landlord to perform Landlord's Work.
Tenant hereby acknowledges that Landlord's Work shall be performed
while Tenant is occupying the Demised Premises. Tenant hereby
acknowledges and agrees that Landlord shall not be liable for any
inconvenience to Tenant or for interference with Tenant's business
or use of the Demised Premises during the performance of Landlord's
Work . Tenant and its employees, invitees, agents and
contractors may use the Demised Premises during the performance of
Landlord's Work at their own risk, and Landlord shall not be
responsible for injury or damage to property occasioned by the
performance of Landlord's Work unless same is due to Landlord's
negligence or willful misconduct. Landlord shall promptly following
the date hereof, file applications for the necessary building
permits required for the performance of Landlord's Work and use due
diligence to pursue the issuance of same. Notwithstanding anything
to the contrary contained herein, if Landlord has not achieved
substantial completion of Landlord's Work by the date that is nine
(9) months following the date of issuance of a building permit for
the performance of the Landlord's Initial Construction, and
provided that such delay is not attributable to delays beyond the
reasonable control of Landlord or tenant delay, then Tenant may
deliver to Landlord written notice (the "Self Help Notice") of its
intent to exercise its Self Help Remedy (as defined below). If
Landlord has still not achieved substantial completion by the
thirtieth (30th) day following effective delivery of the Self Help
Notice, then Tenant may deliver to Landlord written demand to cease
performance of the Landlord's Work, together with Tenant's written
election to undertake the Self Help Remedy. The "Self Help Remedy"
shall be the empowerment of Tenant to engage its own licensed,
insured and reputable contractors and subcontractors for the
purpose of completing the Landlord's Work, under the direction of
Tenant. However, Tenant acknowledges and agrees that, with respect
to any aspect(s) of the Landlord's Work that would affect, touch or
concern the Building systems, Tenant shall only engage a
contractor(s) or subcontractor(s) reasonably approved by Landlord
for the performance of the subject work. If Tenant exercises the
Self Help Remedy, then upon Tenant having achieved substantial
completion, Landlord shall pay to Tenant, within thirty (30) days
of tenant's invoice therefore (with reasonable backup
documentation) the reasonable out-of-pocket expenses actually
incurred by Tenant directly in connection with the Landlord's Work.
In the event that Landlord fails to pay such invoice within ten
(10) days after the date Tenant obtains a final, non-appealable
judgment for same, Tenant may offset the amount of such invoices
against ensuing payments of Rent (but in no event shall the offset
against any particular installment of Rent exceed $20,000.00).
Notwithstanding the foregoing, in the event of any dispute between
the parties as to whether or not Tenant has the right to employ the
Self Help Remedy, either party may submit such dispute to binding
expedited arbitration conducted by the American Arbitration
Association ("AAA"). The arbitration shall be commenced and held in
the County of Suffolk at the AAA office or if none at another
mutually agreeable location near the Building and shall be
conducted before a single, independent arbitrator pursuant to their
Commercial Arbitration Rules and Procedures. The arbitrator must be
an individual with at least ten (10) years experience in the
Nassau/Suffolk commercial real estate market. The sole issue before
the arbitrator shall be whether Tenant is entitled to the employ
the Self Help Remedy and in no event shall the arbitrator be
empowered to award damages of any nature. The decision of the
arbitrator shall be final and binding upon Landlord and Tenant.
2.4 Taxes . Effective as of July 1, 2009, Article 5 of
the Lease, as replaced pursuant to the provisions of Section 2.1.7
of the First Amendment is hereby modified and amended by deleting
"2003/2004" in Article 5(a)(ii) and inserting "2009/2010" in lieu
thereof.
2.5 Renewal Option . Effective as of the date hereof, the
following is inserted as a new Article 37 of the Lease:
RENEWAL OPTIONS
37. Tenant shall have the right, to be
exercised as hereinafter provided, to extend the term of this lease
for two (2) periods of five (5) years each (each, a "Renewal Term",
and together, the "Renewal Terms") upon the following terms and
conditions: (A) That at the time of the exercise of such right and
at the commencement of each Renewal Term, Tenant shall not be in
default (beyond applicable notice and cure periods provided in this
lease for the cure thereof) under this lease; (B) That Tenant shall
notify Landlord in writing that Tenant intends to exercise this
option no earlier than the date that is twelve (12) months prior to
then scheduled Expiration Date and no later than the date that is
nine (9) months prior to then scheduled Expiration Date, TIME BEING
OF THE ESSENCE with respect to such date; (C) That at the time of
the exercise of such right and at the commencement of each Renewal
Term, Tenant shall not have assigned this lease or sublet any
portion of the Demised Premises, except to an entity taking
pursuant to Article 16(C) of the Lease; (D) That the Renewal Terms
shall be upon the same terms, covenants and conditions as in this
lease provided, except that (i) there shall be no further option to
extend this lease beyond the second Renewal Term referred to above;
(ii) the Demised Premises shall be delivered in its then "as is
@
condition; and (iii) the Rent to be paid by Tenant during each
Renewal Term shall be as follows:
(a) During the first year of the first
Renewal Term, the Rent shall equal the Fair Market Annual Minimum
Rent (as hereinafter defined), but in no event less than
$756,994.32. Said sum shall be payable in equal monthly
installments.
(b) During each of the second through
fifth years of the first Renewal Term, the Rent shall be increased
by 3.5% per annum over the Rent payable for the prior year. Said
sums shall be payable in equal monthly installments.
(c) During the first year of the
second Renewal Term, the Rent shall equal the Fair Market Annual
Minimum Rent (as hereinafter defined), but in no event less than
the rental rate applicable for the last full calendar month prior
to the Expiration Date. Said sum shall be payable in equal monthly
installments.
(d) During each of the second through
fifth years of the second Renewal Term, the Rent shall be increased
by 3.5% per annum over the Rent payable for the prior year. Said
sums shall be payable in equal monthly installments.
(E) "Fair Market Annual Minimum Rent"
shall mean the rate Landlord generally receives for new leases for
comparable space in the Building as of the date which is six (6)
months prior the Expiration Date. Fair Market Annual Minimum Rent
shall not mean "net effective rent to Landlord". In determining
fair market annual minimum rent, no adjustment shall be made in
consideration of and Tenant shall not be entitled to a credit for
Tenant improvements, brokerage commissions, rent concessions and
other concessions which Landlord may typically offer to other
tenants. Landlord shall give Tenant notice of its determination of
Fair Market Annual Minimum Rent or notice that the Rent shall be
the minimum amounts set forth above on or before the date which is
six (6) months prior to the then scheduled Expiration Date. In the
event Tenant disputes Landlord's determination of Fair Market
Annual Minimum Rent, and the parties cannot agree within thirty
(30) days thereafter, Tenant, by written demand served upon
Landlord within five (5) days after end of such thirty (30) day
period, may commence arbitration strictly in accordance with the
terms and conditions of this Subparagraph. If Tenant shall fail to
demand arbitration as set forth above within said five (5) day
period, Tenant shall be deemed to have accepted Landlord's
determination of Fair Market Annual Minimum Rent. The sole issue to
be determined by such arbitration shall be the Fair Market Annual
Minimum Rent in accordance with this Subparagraph. Within thirty
(30) days after such written demand, each party will obtain and
deliver to the other, an appraisal (each, an "Appraisal") a
licensed appraiser with at least ten (10) years experience in the
Nassau/Suffolk commercial/industrial real estate market who is not
an active real estate broker or salesperson. If there is less than
a five (5%) difference between Fair Market Annual Minimum Rent
determined by each Appraiser, the Fair Market Annual Minimum Rent
shall be deemed to be the average of the two (2) determinations
made by the Appraisers. If there is a five (5%) or greater
difference between Fair Market Annual Minimum Rent determined by
each Appraiser and the parties cannot agree upon the Fair Market
Annual Minimum Rent within thirty (30) days of the delivery of the
Appraisals, the two (2) Appraisers will select a third licensed
appraiser meeting the same qualifications and the third appraiser
shall select the determination contained in one of the two
Appraisals. The appraisers will not have the power to add to,
modify, detract from or alter in any way the provisions of this
lease or any amendments or supplements to this lease. No appraiser
is authorized to make an award for damages of any kind including,
without limitation, an award for punitive, exemplary, consequential
or incidental damages. Landlord and Tenant will pay for the
services of its own appraiser and shall share the cost of the third
appraiser, if applicable. The decision of the third appraiser will
be final and non-appealable and may be enforced according to the
laws of the State of New York. Notwithstanding anything to the
contrary contained herein, in the event Tenant disputes Landlord's
determination of the Fair Market Annual Minimum Rent, Tenant shall
nevertheless continue to pay rent at the minimum rent set forth
above. In the event the rent as determined hereunder is at variance
with the rent being paid by Tenant, Tenant shall either pay the
difference in a lump sum or receive a credit toward the next
ensuing payments of Rent and/or additional rent, as the case may
be.
(F) The Renewal Option set forth
herein are personal to Chyron Corporation, and is non-transferable
by operation of law or otherwise, except to an entity taking
pursuant to Article 16(C) of the Lease.
2.6 End of Term . Effective as of the date hereof,
Article 24 of the Lease, as modified and amended by Section 2.1.4
of the First Amendment is hereby further modified by (a) deleting
the phrase "two hundred (200%) percent" in the seventh line of the
language added pursuant to Section 2.1.4 of the First Amendment and
inserting the phrase "one hundred fifty (150%) percent" in lieu
thereof, (b) inserting the words "if the holdover lasts longer than
thirty (30) days," at the beginning of clause (ii) of the language
added pursuant to Section 2.1.4 of the First Amendment, (c)
inserting the words "and binding" after the word "executed" in the
fifteenth line of the language added pursuant to Section 2.1.4 of
the First Amendment, and (d) deleting clause (iii) in the language
added pursuant to Section 2.1.4 of the First Amendment in its
entirety.
2.7 Taxes . Effective as of the date hereof, Article 5 of
the Lease, as replaced pursuant to Section 2.1.7 of the First
Amendment is hereby modified and amended by:
(A) deleting Article 5(d) in its entirety,
(B) inserting the following at the end of Article 5(e):
However, if Landlord does not
institute a proceeding to reduce the taxes (a "Tax Contest") with
respect to any tax year, and Tenant makes written request for
Landlord to institute a Tax Contest with respect to the subject tax
year, then, unless Landlord has a commercially reasonable basis to
refrain from instituting a Tax Contest, Landlord shall be required
to institute and prosecute a Tax Contest with respect to the
subject tax year. If, as a result of a A Tax
Contest, Landlord receives a refund of Taxes attributable to any
tax year or tax years occurring during the Term (including the Base
Year Taxes), then, provided Tenant had made full payment of
Tenant's Tax Payment for all affected Escalation Years, Landlord
shall recalculate each affected Tenant's Tax Payment based upon the
finally determined Taxes for each affected tax year and deliver a
revised Landlord's Statement to Tenant. If the Tenant's Tax Payment
on the revised Landlord's Statement exceeds the amount paid by
Tenant for the original Tenant's Tax Payment, then Tenant shall pay
to Landlord such excess, as additional rent, within fifteen (15)
days of the delivery of the revised Landlord's Statement. In the
event that
